Minority Interest

10. Provisions

8. Group Equity The development of Group equity reported in the balance sheet of VOEST-ALPINE

STAHL-Group is shown in a separate table Development of Equity, which is a part of this financial statement.

The share capital on the balance sheet date amounted to ATS 3,300 millions and is divided into 33.0 million share certificates. The transition to EUR 239.82 millions has been registered in the company ledger.

The statutes of VOEST-ALPINE STAHL AG authorize the Managing Board to increase the share capital until 30 June 2004 by a further EUR 47.96 millions, if necessary in several tranches, by way of issue of new individual share certificates.

The transition of equity on 31/3/2001 reports a capital reserve of EUR 290.69 millions comprised of EUR 200.46 millions restricted reserves and EUR 90.23 millions non- restricted capital reserves. Restricted capital reserves are only to be used to equal- ize a balance sheet loss that would otherwise have to be reported.

The revenue reserves reported in the table Development of Equity comprise solely unrestricted revenue reserves.

The consolidated balance sheet profit reported in the consolidated financial state- ments is identical to the balance sheet profit of VOEST-ALPINE STAHL AG, which is still being prepared according to national legal requirements and is to be distributed as a dividend.

On 30/6/2000, VOEST-ALPINE STAHL AG purchased 1,323,300 (4.01%) of its own shares. It is intended to use these shares for an employee share ownership program that was approved by the Annual General Shareholders’ Meeting of 3/7/2000. The own shares are openly deducted from the equity.

31/3/2000 31/3/2001

EUR millions EUR millions

Cash value of the severance payment commitment (PBO)

= Provisions for severance payments on 1/4 209.46 202.70

Changes in the scope of consolidation –2.54 2.31

Service costs and actuarial result –16.80 –14.01

Interest expense 12.58 12.16

Cash value of the severance payment commitment (PBO)

= Provisions for severance payments on 31/3 202.70 203.16

EUR thsds. EUR thsds. Capital stock 239,820.35 Own shares –9,616.79 230,203.56 Capital reserves 290,685.74 Own shares –8,038.67 282,647.07

Unrestricted revenue reserves 978,362.35

Own shares –24,504.84

953,857.51

Balance sheet profit 62,807.72

Own shares 0.00

62,807.72

Provisions for other personnel expenses comprise mainly provisions for restructuring expenses, performance bonuses and variable salary components.

V O E S T- A L P I N E S TA H L A G · 2 0 0 0 / 2 0 0 1 95

11. Liabilities

V O E S T- A L P I N E S TA H L A G · 2 0 0 0 / 2 0 0 1

94

Provisions for pension payments developed as follows in 2000/2001:

For the composition of provisions for deferred taxes refer to Note 6 "Prepaid Expen- ses and Accruals".

The development of other provisions that are valued according to IAS 37 is shown in the following table:

31/3/2000 31/3/2001

EUR millions EUR millions

Cash value of pension commitments (PBO)

on 1/4 100.70 107.35

Changes in the scope of consolidation –0.71 2.81

Service costs and actuarial result 1.80 –1.75

Interest expense 5.56 6.44

Cash value of pension commitments (PBO)

on 31/3 107.35 114.85

Pension fund assets 67.10 66.51

Provisions on 31/3 40.25 48.34

Remaining Remaining

Book Value Book Value term of term of

31/3/2000 31/3/2001 up to 1 year more than 1 year

EUR millions EUR millions EUR millions EUR millions

Liabilites to credit

institutions 608.86 588.90 308.72 280.18

Other long-term interest-bearing

liabilities 80.53 36.78 3.61 33.17

Advance payments received

on orders 18.38 13.20 7.80 5.40

Trade accounts payable

– from asset acquisitions 48.56 49.10 49.10 0.00

– other 214.56 268.90 267.18 1.72 Bills payable Own bills 21.89 35.44 35.44 0.00 Liabilities to affiliated companies

– trade accounts payable 36.35 58.70 58.70 0.00

– from financing and clearing 5.61 7.36 6.96 0.40

– from asset acquisitions 0.05 0.09 0.09 0.00

– from other 0.04 4.10 4.10 0.00

Liabilities to companies in which an investment is held

– trade accounts payable 1.37 2.18 2.18 0.00

– from financing and clearing 23.62 33.45 33.45 0.00

– from asset acquisition 0.00 0.19 0.19 0.00

– other 0.61 0.14 0.14 0.00

Other liabilities

– from taxes 16.65 28.26 28.24 0.02

– from social security 16.12 16.65 16.65 0.00

– from financing 7.19 3.29 2.74 0.55

– from asset acquisitions 0.03 7.69 7.67 0.02

– other 89.94 112.06 110.60 1.46

1,190.36 1,266,48 943.56 322.92

Changes in

the scope Currency

As of of conso- Translation Con- Re- Allo- As of Of which in EUR millions 1/4/2000 lidation Difference sumed versal cation 31/3/2001 long-term

Provisions for accrued

vacation 50.96 1.10 12.50 16.95 56.51

Provisions for

anniversary bonuses 43.85 0.14 1.06 0.15 5.75 48.53 48.53

Provisions for other

personnel expenses 23.08 0.84 –0.02 18.35 2.39 35.21 38.37 2.51

Tax provisions 14.63 4.44 –0.23 6.85 0.02 39.55 51.52

Provisions for deferred

taxes 47.57 0.44 –0.13 8.44 0.17 10.20 49.47 49.47

Provisions for future back charges and missing

initial billing 21.27 0.03 9.08 3.10 9.82 18.94 6.72

Provisions for guarantees

and other risks 10.51 0.22 0.01 1.48 1.73 5.35 12.88 1.22

Provisions for imminent losses from pending

transactions 2.91 3.66 0.09 7.25 6.41

Other provisions 23.11 1.01 –0.02 7.33 6.66 21.65 31.76 4.14

cy and the possibility to utilize revolving credit agreements with banks to their limits, a contractually agreed liquidity reserve of EUR 72.67 millions exists to bridge possible downturns due to the economy.

Price risk

Determination of price risk:

VOEST-ALPINE STAHL AG, to quantify interest and currency risk, utilizes the value at risk concept. Based on the risk metrics data of J.P. Morgan the maximum loss poten- tial for the next business day and year is determined with a 95 % certainty. The cor- relation of the individual currencies is taken into account. The interest rate manage- ment also utilizes the present value basis point method.

Currency risk

Currency risk arises from the fact that the value of a financial instrument can change due to exchange rate fluctuations.

A first hedge is initially provided through items that are naturally self contained, for instance trade receivables in USD opposed to liabilities for the purchase of raw mate- rials in USD (USD netting). A further possibility arises from the utilization of derivative hedging instruments. VOEST-ALPINE STAHL AG hedges the budgeted foreign cur- rency payment flows (net) of the next 12 months. Hedging for a longer term only occurs in the case of contractual business projects.

Budgeting differentiates between recurrent business and project business. Project business is only included after a contract has been signed, while recurrent business is budgeted for on the basis of forecasts. The coverage ratio is between 60 % and 90 %. The further the cash flow is in the future, the lower the security ratio.

Contingencies are valued according to IAS 37.

According to IAS 32 a differentiation is made between original and derivative financial instruments.